MANILA, Oct 2 (PNA) — PTT Philippines has sold 4 million liters of jet fuel to Cebu Pacific, worth Php 170 million, which will be delivered in a year’s time.
“Three hundred twenty thousand liters a month, around 4 million liters a year. That’s around 170 million pesos,” PTT’s General Manager for Trading Danilo Alabado said Wednesday during the “Jet fuel supply contract between PTT Phils and Cebu Pacific” at the Luxent Hotel in Quezon City.
The four million liters are broken down to Tigerair’s delivery of 200,000 liters per month and Cebu Pacific’s 120,000 liters per month, specifically for Diosdado Macapagal International Airport located in Subic, Clark.
The said supply purchased by Cebu Pacific accounts for 10-20 percent of its Subic fuel capacity. The fuel supply will be given out through an accredited refueler service provider.
The PHP 170 million deal is estimated to be around 3-4 percent income of PTT, while Cebu Pacific’s previous contracts with PTT are worth its income at 21-25 percent.
However, PTT General Manager for Trading Danilo Alabado stated that the figure may still increase depending on Cebu Pac’s expansion, which was revealed by Cebu Air Inc’s Vice President For Cargo and Fuel Management Joseph Macagga, who added it plans to establish a flight from Clark to Bangkok and Clark to Singapore.
He further pointed out that there is still no estimate on this growth due to its dependency on the scheduling of the flight, either daily or weekly.
Moreover, PTT is gearing up a facility for Cebu Pacific, capable of storing 1,400 liters of fuel.
Aside from Cebu Pacific, United Arab Emirates, UPS Airlines, Singapore Airlines are also buying fuel supply from PTT in Pampanga, while the U.S. Military aircraft in Subic and Qatar Airways are also being fuel supplied by PTT through Lubewell.
Cebu Pacific has been purchasing jet fuel from PTT Philippines for the last 15 years, but has a different supplier for its Mindanao area. Macagga explained that PTT does not have a branch yet in Mindanao.
The Cebu Pacific official also stated that the company can attribute growth to PTT’s deals, since 50 percent of total fuel cost accounts to the expense of the carrier.
“We’re able to expand physically, because of PTT. Right now, our single largest cost is fuel, about 50 percent of our total cost,” Macagga said.
Macagga added that Cebu Pacific, which is owned by Gokongwei’s J.G. Summit Holdings Inc., frequently buys during the vacation seasons of summer and Christmas. Cebu Pacific currently has 54 aircrafts.
The Thai-based oil company supplies about 70 percent of Cebu Air’s jet fuel needs for both domestic and international flights. p>Last Sept, PTT has also said that there are ongoing talks with J.G. Summit to bring in PTT’s chemical brand to the Philippines.
Singapore’s Tiger Airways and Philippines’ Cebu Pacific had entered into an agreement last July to collaborate in their domestic and international lines. It created the biggest network of flights from the Philippines to the region.
On the other hand, PTT targets to sell 830 million liters of fuel, but PTT’s General Manager for Trading Danilo Alabado projects that the figure may further increase to 920 million liters. He stressed that PTT has already surpassed half of the 830 million target, during 2014’s first half.
Also, PTT Philippines is projecting a growth of 11 percent for 2014, mainly increased due to Pilipinas Shell Power Corporation’s (PSPC’s) bulk purchase from the company, along with other distributors.
The oil company initially projects a growth of 5 percent per year, not particularly on revenue, but more on volume. It targets a sale of 1 billion liters for 2015.
Currently, PTT Phils has more than 70 retail stations, scattered in the country, mainly based in Luzon and Cebu in Visayas. (PNA)